ON24 Comments on Record of Shareholder
Engagement toward Shared Goal of Near-Term Capital Returns and
Long-Term Value Creation Following Letter from Indaba
ON24 (NYSE: ONTF) (“ON24” or the “Company”), a leading sales and
marketing platform for B2B digital engagement, today announced that
the Company’s Board of Directors has authorized the replacement of
the Company’s prior capital return program with a new $100 million
capital return program. The Company intends to execute its capital
return program with available cash on hand and expects to
expeditiously initiate the program following its upcoming quarterly
financial reporting announcement.
Since the fourth quarter of 2021, ON24 has repurchased $41
million of outstanding common stock under its prior $50 million
repurchase authorization announced in December 2021. Upon
completing the new capital return program, ON24 will have returned
more than $140 million to shareholders since the fourth quarter of
2021.
The Board of Directors of ON24 issued the following statement in
connection with the new capital program:
Following a review of our balance sheet
relative to our business needs and in considering feedback from
investors, we believe the substantial return of capital we are
announcing today strikes an appropriate balance between maintaining
our focus on growth and enhancing near-term value for our
shareholders. The authorization still leaves ON24 with ample
liquidity to invest in strategic priorities while navigating
uncertain macro-economic headwinds.
The Board and management have simultaneously
been undertaking a significant review of our business and
operations to identify opportunities to accelerate our path to
profitability. Combined with the capital return program and our
ability to leverage a balance sheet that will remain strong, we
believe there is significant opportunity ahead for ON24 to create
additional value for shareholders. We look forward to management
sharing more details in connection with ON24’s upcoming earnings
call.
The Company also issued the following statement in response to
the letter issued today by Indaba Capital Management
(“Indaba”):
ON24 regularly maintains open communications
with its shareholders and values constructive input toward the goal
of enhancing value for all shareholders of the Company. We have
attempted to engage constructively with Indaba at every point
leading up to the $100 million capital return program we are
announcing today.
Since Indaba initially demanded to meet with
the ON24 Board of Directors late last year, we have provided
significant access to our directors. More recently, the Company
entered into a non-disclosure agreement (“NDA”) such that the Board
and management had more flexibility to openly engage with Indaba,
and members of the Board have met directly with Indaba four times
since December 2022 to discuss capital allocation and other matters
including the Company’s path to profitability and long-term
business outlook.
While the Board has engaged consistently,
constructively and transparently, Indaba has regularly shifted its
demands. When Indaba first approached the Company regarding the
potential to return more capital in September 2022, Indaba asked
the Company to return $100 million through a tender offer. Since
then, their demands have escalated and ranged up and down in
quantum from $150 million to $175 million with near weekly changes
to their preferred mix of the form by which to return capital.
The Company’s management team and directors
have approached the decision on updating our capital allocation
plan in a comprehensive manner – by taking a hard look at our
financial plan and by taking input from shareholders – not just one
shareholder. We have spent time with other top shareholders to
understand their perspective on capital return, appropriate minimum
cash balances and alignment with our long-term growth objectives.
The Board and management team are thoughtfully considering the
method of capital distribution that will be most advantageous to
all shareholders, and we welcome additional shareholder input in
that process, including further engagement with Indaba.
Indeed, as indicated to Indaba, we were open
to continued engagement under an NDA to attempt to further
incorporate their feedback and views ahead of our upcoming
financial results disclosure. As the Board has not simply caved to
Indaba’s demands, rather than engage further, Indaba now seems
intent on making public noise, prior to the expiration of our
current NDA, while threatening an unnecessary campaign in
furtherance of their own short-term interests.
ON24 has a dedicated and experienced Board of
Directors that is committed to representing the interests of all
shareholders. The ON24 Board comprises seven highly qualified
individuals, six of whom are independent, and two of whom have
joined the Board in the last 12 months. The Board regularly
evaluates its composition to ensure it reflects the appropriate
qualifications and expertise to drive value for ON24 shareholders.
We expect to continue normal course refreshment as part of ongoing
governance planning and the Board will review any potential Indaba
candidate in accordance with its usual processes.
We are excited for the future of the Company
and our potential to drive near- and long-term value, and we are
committed to continuing our dialogue with all shareholders as we
seek to achieve our shared goal of value creation.
The Company notes that its new capital return authorization does
not constitute a legal obligation to repurchase shares. The timing,
number of shares repurchased and prices paid for the repurchased
shares under this program will be at the discretion of management
and will depend on market conditions as well as regulatory
limitations, including applicable blackout period restrictions. The
Company may effect the capital return program through an
accelerated share repurchase, open market purchases, special
dividend, block trades, unsolicited negotiated transactions, a
trading plan that may be adopted in accordance Rule 10b5-1, a
tender offer or in any other manner that complies with the
provisions of the Securities Exchange Act of 1934, as amended.
Goldman Sachs & Co. LLC is serving as financial advisor to
ON24 and Skadden, Arps, Slate, Meagher & Flom LLP is serving as
ON24’s legal counsel.
Fourth Quarter and Full Year Financial Results
As previously announced, ON24 will disclose its fourth quarter
and full year 2022 financial results after U.S. markets close on
Tuesday, February 28, 2023. ON24 management will host a conference
call and webcast that day at 2:00 p.m. Pacific Time (5:00 p.m.
Eastern Time) to discuss its business and financial
performance.
About ON24
ON24 is on a mission to re-imagine how companies engage,
understand and build relationships with their audience in a digital
world. Through our leading sales and marketing platform for digital
engagement, businesses use our portfolio of webinar, virtual event
and content experiences to drive engagement and generate
first-party data, delivering revenue growth across the enterprise
– from demand generation to customer success to partner
enablement.
ON24 powers digital engagement for industry leaders worldwide,
including 3 of the 5 largest global technology companies, 3 of the
6 largest US banks, 3 of the 5 largest global healthcare companies,
and 3 of the 5 largest global industrial manufacturers, enabling
organizations to reach millions of professionals a month for
billions of engagement minutes per year with all the first-party
data being captured, generated and integrated from one place. ON24
is headquartered in San Francisco with global offices in North
America, EMEA, and APAC. For more information, visit
www.ON24.com.
Forward-Looking Statement
This document contains “forward-looking statements” under
applicable securities laws. In some cases, such statements can be
identified by words such as: “expect,” “convert,” “believe,”
“plan,” “future,” “may,” “should,” “will,” and similar references
to future periods. Forward-looking statements include express or
implied statements regarding our ability to achieve our business
strategies, growth, or other future events or conditions. Such
statements are based on our current beliefs, expectations, and
assumptions about future events or conditions, which are subject to
inherent risks and uncertainties, including the risks and
uncertainties discussed in the filings we make from time to time
with the Securities and Exchange Commission. Actual results may
differ materially from those indicated in forward-looking
statements, and you should not place undue reliance on them. All
statements herein are based only on information currently available
to us and speak only as of the date hereof. Except as required by
law, we undertake no obligation to update any such statement.
Important Additional Information and Where to Find It
The Company plans to file proxy materials with the U.S.
Securities and Exchange Commission (the “SEC”) in connection with
the solicitation of proxies for the Company’s 2023 annual meeting
of stockholders (the “2023 Annual Meeting”). Prior to the 2023
Annual Meeting, ON24 will file a definitive proxy statement (the
“Proxy Statement”) together with a WHITE proxy card. STOCKHOLDERS
ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE
COMPANY WILL FILE WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Stockholders will be able to obtain, free of charge,
copies of the Proxy Statement, any amendments or supplements
thereto and any other documents (including the WHITE proxy card)
when filed by the Company with the SEC in connection with the 2023
Annual Meeting at the SEC’s website (http://www.sec.gov) or at the
Company’s website https://investors.on24.com/overview/default.aspx)
or by contacting Okapi Partners LLC by phone at (212-297-0720), by
email at info@okapipartners.com or by mail at 1212 Avenue of the
Americas, 24th Floor, New York, New York 10036.
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers
and other employees may be deemed to be participants in the
solicitation of proxies from stockholders in connection with the
2023 Annual Meeting. Additional information regarding the identity
of these potential participants, none of whom, other than Sharat
Sharan, Jayesh Sahasi and James Blackie, owns in excess of one
percent (1%) of the Company’s shares, and their direct or indirect
interests, by security holdings or otherwise, will be set forth in
the Proxy Statement and other materials to be filed with the SEC in
connection with the 2023 Annual Meeting. Information relating to
the foregoing can also be found in the Company’s definitive proxy
statement for its 2022 annual meeting of stockholders (the “2022
Proxy Statement”), filed with the SEC on April 27, 2022. To the
extent holdings of the Company’s securities by such potential
participants (or the identity of such participants) have changed
since the information printed in the 2022 Proxy Statement, such
information has been or will be reflected on Statements of Change
in Ownership on Forms 3 and 4 filed with the SEC. You may obtain
free copies of these documents using the sources indicated
above.
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version on businesswire.com: https://www.businesswire.com/news/home/20230208005978/en/
Media Contact: Tessa Barron press@on24.com Investor Contact:
Lauren Sloane, The Blue Shirt Group for ON24
investorrelations@on24.com Okapi Partners LLC Jason Alexander /
Patrick McHugh 212-297-0720 info@okapipartners.com
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